Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The premise of this legislation is that Australia's national government should be responsible for our international relations. That's a reasonable proposition and it's one we support. If only the leader of Australia's national government, Mr Morrison, took this idea to heart. All the legislation in the world is not going to change the fact that we currently have a Prime Minister who doesn't take responsibility for anything other than political slogans and marketing photo-ops. It is, indeed, past time for Mr Morrison to take responsibility for Australia's foreign relations. It is past time for him to take the action on climate change that enables us to be a partner of choice in our region and to stop leaving a vacuum that others will fill. It is past time for him to show leadership in preparing Australia to manage the impact of a more assertive China rather than leaving it to the most extreme members of his backbench to score cheap points over China and diaspora communities. It is past time for him to take responsibility for diversifying Australia's export markets and the hardworking Australians who depend upon them, having overseen Australia becoming more reliant than ever on China for trade. It is past time for Mr Morrison to do what Mr Howard recommended and seek to engage, leader to leader, with the President of China to make our interests clear. It is past time for Mr Morrison to do what he says he wants to do in this bill, which is to take responsibility for Australia's foreign relations. But I'm afraid Mr Morrison doesn't actually want to take responsibility for it.

He wants two things with this bill: to gain another weapon to politically bludgeon state premiers he doesn't like and to create a distraction from the tragic aged-care scandal that was dominating the news when he rushed to announce this new law. He wanted to be able to say, 'Don't be horrified by some 600-plus deaths in aged-care homes,' regulated by his government. 'Instead, look over there to what state premiers are doing, forming partnerships with other countries.' It's the same approach that Mr Morrison takes with another area of federal responsibility—our national borders and quarantine arrangements. Mr Morrison famously said, 'I stopped the boats,' and stood up a federal quarantine facility with a moment's notice in the weeks before an election, when he thought it was to his political advantage. This is the same Mr Morrison who then blamed New South Wales for not stopping the Ruby Princess and now says, 'Quarantine of stranded Australians returning from overseas is the states' problem.' He sits back and points the finger of blame when something goes wrong in state-run quarantine but refuses to take responsibility for standing up federal quarantine facilities, which he could. All this, despite 8,000 Australians being stranded overseas in vulnerable situations and an additional 29,000 desperate to come home. This is the same Mr Morrison who wants to take credit when there's a political point to score when the headlines are good and when the photo op is nicely lined up but who doesn't want a bar of it when there's a risk something might go wrong, which is what we saw in South Australia and Victoria.

This legislation may assign responsibility, but only a leader takes responsibility. But, regrettably, when there is so much at stake, Australia has a Prime Minister who wants to play politics for headlines and pose for photo-ops. Yet we are facing some of the most grave strategic circumstances the nation has faced since World War II, an economic downturn more severe globally than any since the Great Depression, escalating competition between the great powers, rising nationalism and waning international cooperation, all of which means we face a less stable, more divided and risker world. Our world is being reshaped and the assumptions we have long held about the stability of the global order and the resilience of our region no longer hold. This means Australia will have to work much harder to secure our interests. We will have to be more self-reliant and more ambitious, and we have to act now to build the world and region we want, one that not only respects sovereignty but also is stable and prosperous. This does require an honest assessment of our own capabilities and a re-investment in all the elements of our national power. It requires leadership, consistency and discipline from our foreign minister and our Prime Minister, leadership to articulate our values and our interests and to advocate them internationally, to explain Australia to the world and the world to Australia. In an increasingly disrupted and complex world, this is more important than ever.

Instead, we have a vacuum of leadership, a government that is knee-capped. The Department of Foreign Affairs and Trade that slashed our development assistance and undermined Australia's credibility as a partner of choice in the region, just at a time when we need to be 'the' partner of choice. We have a foreign minister who appears not to like picking up the phone—not to universities or state governments or even to her foreign counterparts. We have a Prime Minister and a government that too often put domestic political interest over the national interest, and nothing in this legislation changes that reality.

If there were an amendment that could be moved to compel Mr Morrison to put the national interest over his political interests, I'd be moving it. However, because there isn't such an amendment, instead we will be moving amendments to improve the bill. First we will be moving a second reading amendment calling for the government to redraft the bill and address its flaws. These include the absence of an oversight mechanism for decisions made by the foreign minister under the bill to cancel any arrangement entered into by public universities or state, territory or local governments; the lack of any requirement—subject to appropriate arrangements to protect national security—for the minister to provide reasons for a decision to cancel any such agreements, meaning an entity will have no idea what it should do differently; the lack of a process for review of a minister's decision; the lack of clarity in the definition of key terms in the bill such as 'arrangements'; and the regulatory gap in the bill—private universities, which, for reasons still not explained, will not find any international agreement they engage in subject to scrutiny to assess whether it is in the national interest, while public universities will. So Bond University can go about doing whatever foreign deals it likes, but the University of Western Sydney has to meet a higher standard. There is the lack of clarity on the treatment of the Port of Darwin, a strategic asset leased to a private Chinese company for 99 years under Mr Morrison's watch. That has been conspicuously less subject to criticism by this coalition government than decisions taken by Labor states. There is the lack of clarity on how this new regulatory regime will interact with the existing legislation and guidelines that were to safeguard Australian sovereignty—including FIRB processes, University Foreign Interference Taskforce guidelines and the Foreign Influence Transparency Scheme—and there are concerns that the bill presents a sovereign risk that will undermine investment and cost jobs.

Our amendment calls, as we have been doing for some time now, on the minister to engage in genuine consultation with the Australian entities covered by the bill on the design of the regime. As it stands, the bill puts no responsibility on the federal government to do anything to help entities covered by the bill to play their part in supporting the national interest. You see, they only get told when they get it wrong—just another opportunity for Mr Morrison to do what he does so well, which is point the finger at someone else. Surely it is a core function of federal government to support the Australian entities that need to engage with the world. It takes time, energy and effort to provide the leadership that Australians and Australian businesses and institutions require—the leadership to understand Australia's interests and understand how to weigh competing demands to help them act in a manner that is consistent with the national interest. That's the sort of engagement entities need, but instead the engagement with those covered by this legislation is ad hoc.

I suppose we shouldn't be surprised. At a time when the world is more complex and when the impact of that complexity is felt ever more keenly in Australia, the foreign minister regrettably does so little—some might say nothing—to help Australians manage that complexity. You see, safeguarding our sovereignty is about more than passing laws. It is about our resilience. It is about the resilience of our parliaments. It is about the resilience of our institutions, our universities and the private sector. It means people need to understand what is happening and they need to know what to do.

This is one of the reasons why I have repeatedly asked the foreign minister to allow agencies to brief parliamentarians on our ever more complex, consequential, difficult and challenging relationship with China. She keeps saying she's unpersuaded to do that, but somehow she's persuaded to go a whole lot further with this legislation. It is hard to avoid the conclusion that this government is simply not interested in improving the resilience of our institutions and equipping them to manage the risks and opportunities of our international engagement. It is interested in playing political 'gotcha' games when institutions don't succeed in managing these risks. Too often we've seen the Morrison government playing politics with state governments on matters of foreign and strategic policy by chasing media headlines—not by engaging them and actually working through these issues in the interests of all Australians but by having a whack through the media. That's not leadership. What it demonstrates yet again is that this is a Prime Minister not interested in delivering on the national interest. What he's interested in are headlines and political hits on his opponents.

I think we'll always remember that Mr Morrison's first attempt at foreign policy was to announce unilaterally that he was moving Australia's embassy in Israel from Tel Aviv to Jerusalem to help win votes in the Wentworth by-election. That was without any advice from our diplomats and security agencies, and without any regard for the far-reaching ramifications for our foreign policy. Everything this man does is about scoring domestic political points. There's always an angle, even in announcing this legislation. The background spin on this bill by the government was that it was a crackdown on the Premier of Victoria, who entered into a Belt and Road arrangement with Beijing. The Morrison government has never explained its own secret Belt and Road deal with China in 2017, a deal which has never been made public and which the government still refuses to make public. Nor has it explained the commercial implications of this legislation; in the midst of a recession, the government can't guarantee that major commercial projects won't be cancelled or jobs won't be lost.

And it's not just state governments which have been dealt a hypocritical hand by this government. On Mr Morrison's watch, universities have been encouraged to become more reliant on foreign interests. Cuts to our universities have forced them to attract more overseas students and to increase engagement with foreign entities, and now they face any number of arrangements they have entered into being cancelled by the foreign minister with no explanation and no capacity for review. So it is a bill that claims to seek transparency but it is administered in secrecy—a bill that claims to seek transparency that is administered in secrecy!

Labor will seek to increase the transparency for entities affected by the bill. If the government proceeds with this bill instead of withdrawing it and engaging in genuine consultation with affected entities on the design of the regime, re-drafting the bill and re-presenting it to the parliament as soon as possible, we will move substantive amendments in an effort to improve this rushed and flawed bill. We'll move for the minister to be required to table an annual report outlining decisions made under the legislation and engagement with entities covered by the bill to articulate and explain Australia's foreign policy and how entities should engage with foreign entities in the national interest. We'll move to require that this report be referred to the Senate Foreign Affairs, Defence and Trade Legislation Committee for inquiry and report. We will also move that the minister be required to provide reasons to affected Australian entities, and for entities to have the capacity to appeal ministerial decisions to the AAT. And, importantly, we will move for the minister to be required to prepare a report into the lease of the Port of Darwin. I hope, given the expressed desire for this bill to be a bill with bipartisan support, that the minister would want to avoid the very obvious double standard being applied to the LNP decision to lease this critical strategic asset to a foreign company.

I welcome the fact that the government has already moved an amendment in the House to fix the lack of definition of institutional autonomy, a concern that we had previously identified. I hope that in the debate in this chamber the government continues to display a willingness to work in a non-partisan fashion to improve the bill by accepting our remaining amendments.

Labor supports the stated intention of the bill, but its flaws reflect a Prime Minister who puts his political interests above the national interest. The reality is that it was announced in haste, before it was ready and before affected entities were consulted, just so Scott Morrison could change the headlines from the tragic neglect in aged care—on the same day as his minister walked out on scrutiny here in the Senate. That is not responsible stewardship of Australia's national interests. Labor calls on the government to rewrite the legislation and to focus on delivering robust, carefully written laws, instead of just grabbing the headlines. We look forward to the Morrison government giving this proposed bill further consideration, and invite them to work in a bipartisan way to advance our shared national interest.

In conclusion, I move:

At the end of the motion, add: ", but the Senate:

(a) notes:

  (i) the absence of an oversight mechanism for decisions made under the Bill;

  (ii) the desirability, subject to appropriate arrangements to protect national security, of requiring the Minister to provide reasons for decisions, and a process for review of a minister's decision; and

  (iii) the lack of clarity in the definition of 'arrangements' in the Bill;

  (iv) the Minister should make an annual report to the Parliament outlining engagement with entities covered by the Bill, if enacted, to articulate and explain Australia's foreign policy and how entities should engage with foreign entities in Australia's national interest; and

(b) calls on the Government to:

  (i) address the regulatory gap of private universities;

  (ii) provide clarity on the treatment of the Port of Darwin in the Bill before the Bill proceeds;

  (iii) make clear how this regime will interact with the existing legislation and guidelines that work to safeguard Australia's sovereignty, including Foreign Investment Review Board processes, University Foreign Interference Taskforce Guidelines and the Foreign Influence Transparency Scheme, and provide confidence that the Bill does not present a sovereign risk that will undermine investment and cost Australian jobs;

  (v) engage in genuine consultation with Australian entities covered by the Bill on the design of the regime; and

  (vi) redraft the Bill and re-present it to the Parliament at the earliest opportunity".

Janet Rice (Victoria, Australian Greens) Share this | Link to this | Hansard source

I rise to speak on Australia's Foreign Relations (State and Territory Arrangements) Bill 2020 and the related bill. This is a major piece of legislation that the government has put forward, with significant long-term implications. The government says these bills are about foreign policy, and they are, but they're also about the issue of addressing foreign interference in Australia. In fact, the Prime Minister himself has framed it in that way by saying that where any foreign government seeks to undermine the sovereignty of Australia's foreign policy by seeking to do deals with subnational governments then Australia needs to protect itself.

Let's be very clear: we agree that, where any interference by foreign governments occurs, it is a serious issue that needs to be addressed. We would welcome the opportunity to have a serious, thoughtful debate about foreign interference and how to balance actions taken to protect people in governments from foreign interference, protecting legitimate activity and engagement and protecting people's civil and human rights, including by introducing a charter of rights side by side with such legislation. We didn't have this conversation when the government introduced its foreign interference laws two years ago, and we aren't having it now.

My colleague Senator McKim, two years ago, said that that legislation was shoddily drafted and too broad in scope and needed amendments to ensure it was properly targeting foreign interference in our political system, rather than allowing a raft of actions that impacted on freedom of speech and association, catching legitimate dissent in their net. Again today we see hastily drafted, problematic legislation. What's more, there's a distinct lack of clarity about how the legislation before us today intersects and interacts with the 2018 foreign interference legislation.

It's also worth pointing out how so much of this debate about foreign interference and foreign policy actually becomes shorthand for a debate about foreign interference by the Chinese government. We think any debate about foreign interference should be a much broader conversation that recognises the risks to Australia by being overly aligned with US foreign policy, and the risk to our sovereignty by having US bases like Pine Gap on our soil, where some of the information and intelligence that flows through is for US eyes only. That debate should include the risks to our soldiers when they're sent in to fight in American wars on foreign soil and the risks to the rights of Australian citizens like Julian Assange, who, upon uncovering evidence about US war crimes, is persecuted, with ongoing attempts to extradite him to the US, where he could face charges that could result in decades in prison.

The Greens come to this discussion on foreign policy and foreign interference from a perspective that puts human rights first. That critically includes being able to have a domestic debate where people are free to raise human rights concerns and act to apply pressure on other countries without being subject to threats and intimidation. It's important that we speak out loudly and clearly and take action about human rights abuses by the Chinese government against the Uighurs in Xinjiang or East Turkestan in Tibet, and that we speak out about the attack on democracy in Hong Kong and the Chinese government's ongoing persecution of others, including Falun Gong practitioners.

It's also important that we continue to advocate for meaningful action on human rights abuses, wherever they occur—that is, not just in China but in Russia, Saudi Arabia, Palestine, African nations, the Philippines, Cambodia, Vietnam, India, Myanmar and in the US. It's important that we here in Australia voice our support for the Black Lives Matter movement in America and elsewhere internationally. It's also important that we support a global environment that brings pressure to bear on us for our human rights abuses, with over 400 black deaths in custody since the royal commission and our own indefinite incarceration of asylum seekers. It's important that we have a domestic debate where we're able to do that free of foreign interference, and that we withstand other nations' response to that criticism and stay true to our principles of not just accepting that our major trading partners have appalling human rights records.

We must not just turn away and turn a blind eye, as has been the habit of previous governments, and still is. Yes, we have become more vocal about China, but where is the outcry about what's going on in India, in Vietnam, in the Philippines, in Saudi Arabia and in Palestine? It seems it's convenient for us to speak out about China in the current climate, but for other countries who are our allies and our major trading partners, different standards are applied.

It is also important that, when we are speaking out about the actions of foreign governments, we do it in a way that doesn't leave the peoples who originally are from these countries subject to stigma here in Australia. At the same time as we are outspoken against the actions of the Chinese government, we must be aware of the potential for this to have an impact on Australians of Asian origin and we must support them against any racist attacks.

I want to look more broadly now at what needs to occur if we are to seriously tackle foreign interference, and that's to talk about money, to follow the money—recognising, acknowledging and addressing the risks of foreign interference through corporate influence. For a very long time we Greens have been sounding the alarm about the influence of corporations, and in particular corporate donations, on Australia's political system. We want to see systematic change to address that. We welcome the fact that foreign donations above $1,000 to political parties are now outlawed, but this doesn't rule out money politics from foreign players—far from it. We have companies registered in Australia that can take up the slack and still serve the political interests of their foreign owners. So whether it's domestic or foreign interference on our politics and corporations, and the incredibly powerful and wealthy people behind them, there's one straightforward way of stopping them in their tracks and that's to get this money out of politics. Banning large corporate donations full stop would put an end to their influence on politicians and politics; their pushing of policies, and planet-destroying and people-exploiting developments that are not in the interests of ordinary Australians or people around the world. They are anti-democratic and destructive of our future.

My colleague Senator Waters has done incredible work advocating for electoral donations reform. Tightening our electoral donations laws would be a significant step forward. Crucially, I also want to recognise the work that Senator Waters and all of our MPs have done in advocating for a federal ICAC. We're glad that the ALP has followed us on that charge. We think it's crucial. A watchdog with real teeth can make a meaningful difference and we need to see that. It would lessen foreign influence, but it would also address corruption more broadly. We've seen sports rorts, Angus Taylor's 'watergate' scandal, the many other Taylor scandals and too many other scandals to list.

That corruption by the Liberal Party is having a corrosive impact on our democracy. It's reflected in data released today by Griffith University and Transparency International. Their report shows Australians increasingly view corruption as either a very big or a quite big problem, rising from 61 per cent in 2018 to 66 per cent. The proportion of those who believe the federal government is handling corruption issues very badly has risen from 15 per cent to 19.4 per cent over the same period. We think there's a lot to be done to address foreign interference, but we do not believe that this legislation before us today is the right way to do it. Part of that reflects a set of concerns about the process to date. There was no regulatory impact statement prepared for this bill. There was no exposure draft released for comment and discussion. The committee process itself was rushed. Most of the state governments did not make a submission or appear before the inquiry. Given how important this legislation is, and how important it is to get it right, we think that is profoundly disappointing.

That rushed process is reflected in the fact that the committee heard evidence from Professor George Williams that there could be a challenge to this legislation from a state government on constitutional grounds, that there is a fundamental flaw in the very premise of the legislation that relationships with other countries are purely the responsibility of the Commonwealth. Professor Williams gave very compelling evidence to the inquiry that in fact the external affairs powers are invested in both the Commonwealth and the states. The Commonwealth actually does not have the right to overrule the states in the way outlined in this bill. Given the magnitude of the issues involved and the importance of getting it right it's extraordinary that something as fundamental as that hasn't been clarified before the government seeks to pass this bill.

There's a philosophical element too, whether it's appropriate that the Commonwealth should be the sole holder of this role. There's a strong argument that having multiple levels of engagement is actually a much healthier situation. In times like we're in at the moment, when Minister Birmingham isn't able to get his Chinese counterpart to pick up the phone on the escalating trade disputes, there is value to be had in multiple relationships and lines of dialogue, rather than all interactions resting in the hands of the foreign and the trade ministers. And if there is concern that the state governments and indeed universities and local governments don't have the skills to undertake the building of these relationships, an obvious way forward is to build their capacity rather than cutting them off at the knees.

You could argue that this legislation doesn't stop those multiple levels of engagement. But which state government is going to invest in developing a relationship and arrangements and collaborations with foreign governments in the knowledge that it can all be overturned, retrospectively, because the foreign minister doesn't think these arrangements are in our national interest? There's no appeal process. It doesn't have to be based on published foreign policy—just the view of the foreign minister that it's not in the national interest.

Given that flawed approach, it's unsurprising that we've got a profoundly flawed bill. The bill captures university arrangements in a blanket way, with potential enormous implications for their resourcing. Keep in mind that this is a sector that's been under massive pressure and attacked by the Liberal Party, and I'm sure my colleague Senator Faruqi is going to go into further detail. That's not to say that some of the relationships that universities have entered into have all been desirable. I had a memorable conversation about this bill with one expert who said it's no wonder universities have been entering foreign partnerships without necessarily doing their due diligence or determining whether these partnerships are in the national interest, or even the university's interest, because of the pressures they are under. They're at the top of the list for every vice-chancellor. At the top of the list of their key performance indicators has been developing MOUs with external parties, purely because of the massive decline in public funding.

Rather than imposing an unwieldy framework that universities haven't been consulted on, if the government wants to ensure that there is no risk of foreign interference in universities and wants to strengthen their capacity to undertake independent research, then a key step is providing secure, adequate funding. The Commonwealth should adequately fund universities, including increased research funding, a Commonwealth contribution to allow free higher education, and increased funding per student. Let me foreshadow that we will be moving amendments to reflect these concerns.

The other fundamental concern that we have with these bills is that they effectively provide an incredibly powerful tool for the foreign minister, with virtually no oversight. In fact, the bills specifically exempt the minister from judicial review and merit review. And I want to be clear that this isn't a criticism of the current foreign minister and to acknowledge the work of her office and her department on a number of difficult consular cases. However, the reality is that once the bill is passed the power sits with whomever the foreign minister may be and provides the executive with a very far-ranging power, without any checks, in perpetuity. We think it's crucial that anything close to the level of executive power provided by this bill has some level of transparency and oversight. Again, I foreshadow that we have a number of amendments to improve the processes set out in this bill, and I hope these amendments will be supported.

Let me be very clear. We agree that foreign interference is a serious issue that needs to be addressed, but we think the approach the Liberal Party has taken is rushed and underdeveloped. We will be moving amendments to improve this bill, but we have profound concerns about the framework that is being proposed. In summary, to genuinely ensure integrity and transparency in Australia's political system, the Commonwealth should enact donations reform by banning political donations from the mining, property development, tobacco, alcohol and gambling industries and capping all other donations and make sure they disclose publicly in real time. They should root out corruption by establishing a federal anti-corruption commission and fund universities properly. We want to address foreign interference, and there's a lot we can and must do, but this bill isn't the right approach.

I now want to conclude by moving the second reading amendment that has been distributed in my name:

Omit all words after "That", insert:

", the bill be withdrawn; and

(a) The Senate notes that:

  (i) the bill as drafted creates a significant new scheme with wide-ranging implications;

  (ii) no public consultation process was undertaken on an exposure draft bill and there was no

regulatory impact statement prepared prior to the introduction of the bill; and

  (iii) stakeholders have raised a range of concerns about lack of consultation, the compliance

burden and impact of this bill; and

(b) The Senate calls on the Government to undertake more extensive consultation with the wide

range of stakeholders impacted by this proposed legislation".

Sarah Henderson (Victoria, Liberal Party) Share this | Link to this | Hansard source

It is my great pleasure to rise and speak on the Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, which is an incredibly important piece of legislation. This bill is required because the Commonwealth has responsibility for foreign policy. It has the expertise. Yet there is no current requirement for states and territories to consult properly with the Commonwealth on arrangements with foreign governments. This bill is not about excessive intrusion into the states' and territories' business. This is about providing governments, institutions and the Australian people with confidence that due diligence is given to international arrangements to ensure they are consistent with our national interest and with our values. It is wholly unremarkable that the Commonwealth seeks to ensure that the states and territories consult with the Commonwealth in relation to foreign arrangements. It is a pity, I might say, that this legislation is now necessary. It is necessary because there has been a wide range of arrangements, including between state governments and universities and foreign states, which have caused the Commonwealth significant concern. This bill now puts in place the measures required to ensure that, at the forefront of any arrangement with any foreign state, the national interest is paramount.

It also reflects the fact that the Commonwealth, particularly the Department of Foreign Affairs and Trade, has the expertise necessary to assess whether arrangements with foreign governments are consistent with our foreign policy and, therefore, in our national interest. Without appropriate consultation, the Commonwealth has no opportunity to review the proposed arrangements and apply its expertise. Without due diligence, without this consultation, we as a nation risk having a patchwork of contracts, MOUs, relationships and collaborations that could run counter to, or have an adverse effect on, our foreign policy. So what this says to the states and territories and to our universities is that we need to work together on the world stage and speak with one voice.

I'm incredibly proud of the many measures that our government has introduced to combat foreign interference and so I do really take issue with the characterisation of the Greens that this is a rushed approach. Nothing could be further from the truth. In recent years, we've recognised and implemented many different measures to reflect the fact that foreign interference can threaten Australians' sovereignty, our values and our national interests—Australia's way of life. It involves, by very definition, coercive, clandestine, deceptive or corrupting activities undertaken by, or on behalf of, a foreign actor and which are contrary to Australia's sovereignty, values and national interests.

Our bill is not focused on any particular country and neither have any of our measures. They include: the National Security Legislation Amendment (Espionage and Foreign Interference) Act 2018, which criminalised covert and deceptive activities of foreign actors that intend to interfere with Australia's institutions of democracy; the Foreign Influence Transparency Scheme Act 2018, which requires people to register if they engage in parliamentary lobbying, general political lobbying, communications activity or donor activity on behalf of a foreign principal; the Security of Critical Infrastructure Act 2018, which introduced a range of measures, including a register of critical infrastructure assets that gives the Australian government visibility on who owns and controls these assets; and the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2018, which restricts political donations from foreign governments and state owned enterprises. In December 2019, the Prime Minister announced the establishment of the Counter Foreign Interference Taskforce to disrupt and deter those attempting to undermine our national interests. Another measure is the Foreign Influence Transparency Scheme, which aims to provide the public and government decision-makers with visibility of the nature, level and extent of foreign influence on Australia's government and political processes.

We've also made very major improvements to our foreign investment and takeover laws so that the Foreign Investment Review Board has the power to assess the sale of critical state owned infrastructure assets to private foreign investors. This was an issue I raised in my first speech in this place. Keeping our critical assets in Australian hands is incredibly important, and now the Treasurer has a range of powers, including the last resort review power, which does give him the power, when he deems necessary, to require the divestment of foreign interests in a business entity or piece of land.

The bill before the Senate today aims to ensure that state and territory arrangements with foreign governments are consistent with Australia's foreign policy. Australian public universities established under state and territory legislation and the Australian National University will be required to notify the foreign minister of all existing and proposed arrangements they have with foreign entities, including with foreign universities that do not have institutional autonomy.

So this legislation is not about stopping arrangements which benefit Australia. The vast majority of university arrangements will continue as normal. But this will ensure that there is greater transparency of activities between the states and the territories and universities which involve foreign governments, and the Morrison government has now introduced amendments to the bill to describe the circumstances in which a foreign university lacks institutional autonomy, and, under the definition, a foreign university does not have institutional autonomy if a foreign government is in a position to substantially control the university's internal governance, education, research or academic staff.

Of course, this issue has been of particular interest in my home state of Victoria, where the Victorian government has entered into a very contentious agreement with the Chinese Communist government, the Belt and Road Initiative. Of course it is very clear, and we have made very clear, that this bill does not target any country, at all. But certainly there have been very serious concerns raised about these arrangements and, once this bill, as we hope, is law, the Victorian government will then be subject to proper scrutiny and accountability in relation to the agreement that it has reached with the Chinese government, because, at the end of the day, this is all about ensuring that, no matter whether it's a state, a territory or a university, any arrangement with a foreign government must be such that it does not adversely affect Australia's foreign relations or is not inconsistent with Australia's foreign policy. Australia faces many challenges across the globe. This bill before the Senate today is another critical step in ensuring Australia's national security and that our national interests are at the forefront at all times.

Tim Ayres (NSW, Australian Labor Party) Share this | Link to this | Hansard source

If I heard that last contribution correctly, it has only served to deepen my misgivings about the foundations of this piece of legislation—the real rationale—because, when speakers on the other side of this chamber talk about the agreements that states and territories have entered into, they've only got one state in mind and one institution. There's nothing that senators on the other side or members in the other place have got to say about the agreement that the Northern Territory government reached with a Chinese company to lease the port of Darwin for 99 years. There's nothing about the previous Belt and Road Initiative agreements that the Commonwealth signed in 2017. There's no reflection on the previous comments by the now Leader of the House and other senior members of the government supporting those arrangements. It's only an assault on the Victorian government, with, as far as I can see it, very little foundation sitting behind the political logic of this bill, Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, and a related bill.

As is so often the case, this is a government that misdiagnoses the problem, misconceives the solution and is deeply directionless on such an important issue of national interest. It's an issue that requires consistency in approach. It's an issue that requires more voices, not fewer, coming from Australia. It requires deeper engagement from all levels of government across the public sector and business to business from our private sector, NGOs and people to people. The primacy of the Commonwealth on external affairs is not challenged by anybody in this place. We say that, if the Commonwealth government have a primary role, they should lead and provide leadership. So far, they have been incapable of doing that. So far, they have been incapable of articulating a plan to put Australia in the best position in our region, in the strongest position for our national interest.

It should be straightforward to construct a proper understanding of the national interest here. It requires, at all levels of government and in our institutions, a culture of disclosure, engagement and education between the Commonwealth and the institutions, particularly in this period of intensification of regional challenge. But this bill is a ham-fisted effort. It uses a hammer for a job that really requires a Phillips head screwdriver. With the government's track record on these questions, I think we're entitled to a little bit of cynicism about the origins of this piece of legislation.

We know from the Senate estimates process that there was no consultation with the organisations and institutions and levels of government that would be affected by the implementation of the legislation. There's no national security requirement for secrecy. It's not necessary to sneak up on Australian universities or the governments of the states or territories or the peak organisations that represent local government. I think there was no consultation because the government hadn't got anywhere close to finishing the job. What drove the announcement of this piece of legislation was not a properly constructed set of national interest concerns but base domestic political expediency. It was done that week because the Prime Minister needed to get the aged-care crisis off the front pages. That should be a matter of deep regret, if they were capable of it, for senators on the other side.

As Senator Wong said, the issues that face us in the region are more complex than they've ever been before, more challenging than at any other period since the Second World War and more consequential for the Australian national interest than they've been in living memory. They affect not just our trade and our future security for us and our children; they affect the kind of collaboration and work for mutual gain that should be going on in our region. Instead of a considered, consistent approach led by the senior leadership of those opposite, what we've seen is a race to the bottom in what passes for backbench thinking and backbench adventurism about relations, particularly relations with China.

In terms of the states and territories, it's been said that the primacy of the Commonwealth is an unremarkable proposition. It's the absence of the Commonwealth that's the problem; it's the lack of leadership and the lack of clarity that Australia needs. Over the course of the last few years, we've seen a botched, misconceived, ham-fisted approach to our foreign relations. The Prime Minister posed for what I call the Craig-Kelly-member-for-Hughes audience, with that wacky speech to the Lowy Institute about negative globalism, deliberately posturing for some of the characters that inhabit One Nation and some of the elements of the backbench. Minister Payne has suggested that we need to improve the performance of global institutions, but the scale of resources and the scale of the commitment that Australia provides to its embassies and the Department of Foreign Affairs and Trade has dwindled as the challenge got bigger. The suggestion—without any plan, without any means to achieve it, without any acceptance or reading of the geopolitical realities of it—that people with weapons inspection powers should be sent into China, without any capacity to deliver that strategy, was another soundbite foreign policy that led us nowhere. There has been a series of political appointments that give political appointments a bad name in Foreign Affairs. The buffoonery and clownish behaviour of the former Treasurer, Mr Hockey, and Mr Downer hasn't done us any favours at all on the international stage.

You can't have any confidence that this government has a proper construction of the national interest in mind when it frames this kind of legislation. It's true that the states and territories have always had a global and external affairs role. Sydney, Melbourne and Brisbane, at the very least—and I'm sure senators would make a claim for Adelaide, Perth and Hobart—are global cities. Sister-state relationships have been critical to growing economic relations and diversifying and growing our trade. The New South Wales and Guangdong Province agreement in 1979 has been critical to the economic development of the state of New South Wales. What I hope not to see as a result of this legislation is less engagement from the states and territories—fewer voices speaking up for the interests of Australians, Australian businesses and Australian communities. I suspect that what we'll see as a consequence of this legislation in terms of the Port of Darwin lease is nothing. I want to see more engagement from the states and territories. Of course, we'll never know what the position of the states and territories would have been had there been proper consultation. They refused to turn up to the Senate processes because I think they saw it for what it was: a shortened up process.

Let me come to the universities for a moment. I acknowledge that the explanatory memorandum, and the rules that were issued after the processes of the committee, have whittled away some of the regulatory burden for universities. But it remains the case that there was zero consultation for draft legislation that would have created an obligation for individual universities. To have tens of thousands of agreements registered with the Commonwealth, albeit now whittled down to probably a couple of hundred for each university, is an unacceptable proposition. The government wouldn't do it to any other business—they certainly didn't do it to private universities—but they've foisted on the university sector this wall of regulation, with very little public policy rationale, and it sits against the backdrop of an overwhelming hostility from this government to the university sector.

Why not carefully engage and consult? Build from the framework that's already been established in partnership with the universities, the University Foreign Interference Taskforce framework. Pursue the legitimate public and national expectation that institutional resilience, in terms of foreign interference, needs to be defended and protected and grown. Staff should be educated and enabled to participate in foreign engagements in the national interest. We should build a culture of universities and university staff asking questions and encourage more engagement. But the Liberals and Nationals don't understand how universities work. Global collaboration is fundamental to university research. Sharing expertise and research is fundamental to the work that our universities do. To name two things: both the COVID-19 genome sequence and the Gardasil vaccine are the products of deep collaboration and research between Australian universities and universities overseas, including in the People's Republic of China.

Of course, the gaping hole in this legislation is that, while there's a wall of regulation for our public universities, the private universities, such as Bond University, are not touched by the legislative framework. There's no regulation for them. I have seen, in the government's response to the committee's report, that there's a prospect that hospitals will be included at this late stage. There's been consultation, there's no public policy rationale; again it's just a case of sucking up to a few elements of the coalition backbench who have demanded this position.

We should be dealing with this set of issues from an understanding of the facts. There is increasing great power competition in our region. Over the past seven years, Australia hasn't done the work that is required on regional multilateralism and investment in relationships in the region. The work hasn't been done. There's been a withdrawal—a reduction, a diminution—of the capacity of the Department of Foreign Affairs and Trade in terms of the scale of the challenge we face. There are structural challenges for Australia in the region. If events like today's deeply shocking tweet are any indication, we are likely to face more of these kinds of challenges in the future. There has been an aggressive, unhelpful and unfriendly series of actions in terms of our trading relationships. That requires a thoughtful, critical, strategic response founded on a clear understanding of our place and our role in the region and a capacity to articulate a regional commitment to multilateralism and a cooperative nationalism in the region. Instead, we've got guff from the Prime Minister—I still don't quite know what 'negative globalism' means—a series of unforced errors and no plan for how Australia is going to proceed in the region and approach these great issues of state.

Most disturbingly, we've seen a nasty streak emerge in the coalition backbench. I don't think the interventions of Mr Christensen and others have been helpful, I don't think the adventurism of some in this place has been helpful and I don't think recent events in the Foreign Affairs, Defence and Trade Legislation Committee have been helpful. I do think that for a government that says it wants Australia to speak with one voice it wouldn't hurt to have a talk to the backbench and see if they could let it do the talking for a little while in this period of deepening challenge. Instead, discipline is required from the states and territories and the universities. (Time expired)

Mehreen Faruqi (NSW, Australian Greens) Share this | Link to this | Hansard source

I rise to speak to the Australia's Foreign Relations (State and Territory Arrangements) Bill 2020. The Greens will be opposing this ill-thought-out overreach by the government, which comes before us after a rushed and insufficient consultation process. Senator Rice's contribution and dissenting report to the limited inquiry into this legislation reflect the broader terminal issues with this legislation. I want to highlight the impact it will have on the work of our universities.

Prime Minister Scott Morrison has carved a path of destruction through the higher education sector this year. He has allowed tens of thousands of jobs to be lost; performed legislative gymnastics to deny universities JobKeeper; abandoned international students to long queues outside food banks; slashed more than a billion dollars each year from core funding for teaching and learning; and more than doubled the fees for some degrees, to create decades more student debt for a generation of young people facing flat wage growth and skyrocketing unemployment. His justification for refusing to come to the aid of university staff whose jobs were being cut by ruthless management was to appeal to the principle of university autonomy. The Scott Morrison of early 2020 would have you believe that the government ought not interfere with the independence of universities. Well, then it suited them financially to ignore universities but now it suits them ideologically to meddle where there is no need for them to do so—and no good will come of it.

Across the university sector, staff and university management alike are gravely concerned about this legislation. The extraordinarily broad scope of this bill means that the minister, seemingly on a whim dressed up as concern for the government's conception of national interest, can tear up the kinds of agreements between Australian universities and overseas organisations or governments that underpin vital research and arrangements for joint degrees, cultural and student exchanges and happenings as basic as jointly held academic conferences. The potential and, indeed, opportunity for ministerial overreach created by the bill shouldn't be understated, particularly keeping in mind the tendency for Liberal ministers to meddle at every available opportunity, as they've done in the past with local research grants they didn't like the sound of.

It took the government making last-minute amendments to its own legislation to address the question of what counts as institutional autonomy, which was left wide open by the legislation introduced into the other place. But even with the government's own amendments to circumscribe the range of universities and overseas education providers the bill applies to, its scope is still too broad. The bill defines 'an arrangement' as 'any written agreement, contract, understanding or undertaking'. It should be no surprise to anyone that universities have thousands and thousands of agreements that are captured by this definition. Perhaps the Minister for Education was distracted by cutting uni funding while this was drafted and he neglected to mention it to his colleagues. It should come as no surprise that most of the agreements, contracts, understandings and undertakings captured by that definition are entirely mundane and the broader effect will be, as submitters to the inquiry put it, to create a huge administrative burden on both them and the Department of Foreign Affairs and Trade. I know that some of that concern might have been addressed, but it is still a big issue.

Curiously, while the bill captures public unis it does not extend to other entities that routinely deal with the governments and institutions of other nation states, such as private universities, other NGOs and private corporations. I'm not suggesting it should but indicating how baffling it is that were it not for the Liberals' particular ideological vendetta against public unis it would be entirely unclear why the government chose to include them.

With respect to our unis, I note also that they already point to the University Foreign Interference Taskforce that was set up to scope out and address the exact issue this bill is now wading into. The preference of universities, as autonomous institutions that should be free to pursue collaborations and research, is quite clearly to continue their work with the government in identifying and mitigating genuine risks, without allowing the minister to arbitrarily rip up agreements that the coalition doesn't like. I should note, of course, that it's not any old kind of foreign interference in our universities that the government is concerned about. They have no concern about the rivers of gold that weapons manufacturers use to associate their names with the likes of United States studies centres to improve their PR or to promote a sympathetic research agenda. It's selective concern about China that's been driving this from the very start. This picking and choosing of when interference is bad both offends the principle of university autonomy and muddies our foreign policy. If the government were truly concerned about safeguarding university autonomy and protecting against interference then they would have approached the issue holistically, not try to ram through this bill crafted to suit the Liberals' approach to China. We hear the concerns of the university sector about this legislation and its impact. The government's two minor amendments pour a glass of water on a bonfire of this legislation. The problems remaining far outnumber those solved. The only appropriate course is to remove universities from the scope of this legislation. I will be moving an amendment to do so.

If the government is genuine about reversing costs and getting into the business of protecting university independence, then reversing their cuts and giving them financial independence is the first necessary step. In complaining about universities' dealings with groups in other countries the government is pointing to the symptom caused by decades of systemic underfunding that they've been the biggest champions and cause of.

The Greens' commitment to massive new investment in our unis; lifelong, free university and TAFE for all and building university democracy and the power of staff and students is the solution needed here. This work is only made more urgent by the Liberals' ongoing attacks on our unis. The issues with this bill are not limited to its impact on unis. In the first instance, it simply doesn't do what the government claims it will. They are now talking up the supposed alignment of agreements with the national interest, but when they hit the media to discuss it it's all about imposing the Liberal-National vision of the world on states, territories, local governments and unis in an entirely unprecedented way. At its core it ignores that the country benefits from a plurality of approaches to foreign policy and countless links between our communities and the rest of the world. It is not up to the government, and it never should be, to be the sole arbiter of foreign relations and to dictate every moment of every Australian institution's relationship with global organisations.

The consultation around the bill too has been woeful. This is legislation introduced during a pandemic, when the government claims they're too busy to deal with the federal ICAC or the dodgy deals and questionable characters running wild in their ranks. There was no exposure draft, no preliminary consultation and an undemocratically short committee process with only two public hearings into complicated legislation. The government can't explain properly how this will work in practice. The organisations affected haven't been given the time or information to determine its impact, and the parliament hasn't been given the opportunity to scrutinise it appropriately.

We shouldn't be surprised at this behaviour from those opposite, but we will add one to the rapidly rising count of major changes they're rushing through as far from the public eye as possible. Universities Australia put it well in their submission:

Apart from the inherent issues with the Bill, its workability and the potential to deter the collaboration that is the lifeblood of Australian research, there is a range of outstanding questions. These apply to the Bill, but also to the rules that will accompany it… Further detailed consultation is required with the sector on the core issues with the Bill, as well as the many questions inherent in it.

Add to that the questions of constitutional validity, the absurd scope of the proposed framework and the broad or completely absent definitions of key terms in which the implementation turns, plus the lack of the ability to properly review ministerial decisions, and you've got another ideological mess from Scott Morrison. This bill should be opposed.

Amanda Stoker (Queensland, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of Australia's Foreign Relations (State and Territory Arrangements) Bill 2020, knowing that there have been plenty of examples that show the need for it. A good place to start is the Constitution of Australia, a document that, as a bit of law nerd, I feel strongly about, but the details of which matter a great deal.

Section 51 of this document sets out the legislative powers of this parliament, and something that's listed in section 51 is to be the subject of the work of this body to the exclusion of state parliaments. That's an important point for the purposes of this law, because section 51 subsection (xxix) gives this parliament, to the exclusion of state parliaments, the right to legislate on external affairs. Mum and Dad listening at home who may not be as big a law nerd as I am may ask, 'What on earth are external affairs?' External affairs are about Australia's relationships with other countries in the world. It's about foreign relations and diplomacy. And so it's entirely appropriate that the dealings of Australia conducted with other countries be done from the Commonwealth level.

That itself shouldn't be a controversial proposition, and yet we had a recent example in the Belt and Road Initiative where the Victorian government decided it wanted to sign up to China's global infrastructure project, a $1.44 trillion soft power initiative of the Chinese Communist Party designed to project its power among the world. In 2018 Premier Andrews decided to sign up to it without the support of the federal government, without consulting the federal government and without providing any notice to the Department of Foreign Affairs and Trade. It is worth noting that they were the only state government that wanted to sign up to the agreement. It raised a really important question: do they even have the right to do this? In circumstances where we know that the Belt And Road Initiative is all about the ability of the Chinese government to strengthen its ties with particular places and to achieve particular geopolitical objectives, did a state government even have the power in the first place to make that kind of an agreement with the Chinese Communist Party? I'd suggest the conventional position is that they didn't, but the very fact that a state government thought that was something they could do without consultation or without discussion speaks to a need, and it's a need that is met by this bill.

I might move on to another example. In several universities in this country there are Confucius institutes. They're joint ventures between Australian universities, particular Chinese universities and Hanban, an agency that is part of China's education ministry. These are funded by the Chinese government and they operate on 13 Australian university campuses. If they simply fulfil the function of helping people to understand Chinese culture and get to know the language then they could potentially be a really good influence. However, we have come to learn that, rather than simply engaging in cultural and language education, they disseminate Chinese Communist Party propaganda, exert undue influence and attempt to outsource our curriculum to Beijing, striking agreements with our universities that allow to them to veto particular subjects, topics and themes from being taught in those universities. So we're dealing with something different entirely.

I'll give you an example. The centres have signed agreements explicitly stating that they must comply with Beijing—that is the Chinese Communist Party government based in Beijing—and their decision-making authority over teaching in those facilities. If we take the agreement that was initially signed by the University of Queensland, Griffith University, La Trobe University or Charles Darwin University, it stated that they 'must accept the assessment of the headquarters on the teaching quality at centres'. The way that this played out meant that an economics class funded by the Confucius Institute at the University of Queensland was caught teaching propaganda in which Uighurs and pro-democracy protesters in Hong Kong were labelled 'terrorists'. Recently, the University of Queensland named Brisbane's Chinese consul-general in the position of honorary professor without any public announcement and, in doing so, showed the continuation of a tradition of strong influence that university management had told us had been superseded by the second agreement with the Confucius Institute. Last year, in the renewal of that agreement, which I referred to just a moment ago, the UQ committed to those arrangements continuing for the long term. The department of education has implemented a ban on Confucius institutes operating in public schools and, in doing so, they've cited concerns about foreign influence. It's worth noting that, across the United States, institutes of this kind have been shut down in a number of public and private universities.

Perhaps I'll go to a further example—the Thousand Talents program. That program is a Chinese government plan to recruit top scientists from around the world. Of itself, and if done in a purely academic arrangement, that need not be a bad thing. It aims to recruit Australian scientists and academics by offering lucrative incentives, but—and here's a significant condition—it obliges recruits to abide by Chinese law. That means that those academics continue to work full time for Australian universities while making frequent trips to China to visit the affiliated Thousand Talents university with which they have made their arrangement. That means they continue to apply for Australian Research Council grants, with the hope that there will be no checks about where that research will end up. It means that their new inventions face the risk of being patented by China, often in secret. And it means that those inventions are often commercialised, with China to reap the economic benefits, often of the Australian taxpayers' investment. That program has been described by the director of the FBI from the United States, Christopher Wray, as a form of economic espionage, with scientists legally signing away their rights to their intellectual property to China at the same time as they remain employed by Australian institutions. Additionally, China sends its researchers to work at Australian universities, and we need to be sure that, when that happens, the intellectual property that's shared isn't at risk. As I said, the Thousand Talents program need not be a bad thing. It's only when the arrangements associated with it are secret or seek to bequeath the intellectual property in which Australians have invested to the Chinese government that we start to see problems. So, when people say this legislation isn't necessary, we can start with the Belt and Road example, but we can flow through many of the others that I've just pointed to.

The fact is that the Commonwealth has responsibility for foreign policy. It's got the expertise to deal with it properly and to understand its implications and, yet, at the moment, there is no requirement for the states of this good country to consult properly with the Commonwealth and its departments about the arrangements they intend to make with foreign governments. And I think your average mum and dad in their homes tonight would be shocked by that. They would want to know that, if any government of this country wanted to do a deal with a foreign government, it would be something that those looking after foreign policy in this country would know about.

The bill is not about intruding excessively into the territories' and the states' business; instead, it's about providing Australians with the confidence that, when international arrangements are entered into, those who do so are doing it with due diligence, with an understanding of its implications, and to make sure that at all times those agreements are consistent with our national interest and our values. It would have been quite easy for many of those university parties which entered into agreements to establish Confucius Institutes to do so thinking that they were engaging in a perfectly positive exercise, not necessarily understanding that there was the potential for that arrangement to be misused. And so it's important that the Commonwealth seeks to ensure that states and territories respect our constitutional arrangements and, as a consequence, engage in processes that make sure they fully understand what they're entering into before they do so.

The Commonwealth and DFAT have the expertise necessary to make sure that state governments, universities and government agencies fully understand the consequences of the agreements they intend to enter into. They have the expertise to help those governments or institutions understand the consequences of doing so, making sure those things are consistent with our foreign policy. That's because, ultimately, it's all about the national interest. It's all well and good for a university to say, 'It was necessary to fund our bills this year,' or for a state government to say, 'We wanted to build this, that or the other'. Ultimately, everything we do as servants of the Australian people in our various parliaments or, indeed, in a publicly funded institution, has to be about the proper service of the national interest. And if consultation doesn't occur in the way that it should then the Commonwealth won't get an opportunity to properly review those arrangements. And if there isn't that due diligence and consultation we risk—it's a very real risk—having a messy patchwork of contracts, memorandums of understanding or well-meaning, but ultimately undermining, collaboration arrangements which could run counter to or have an adverse effect upon our foreign policy.

This bill is a call to all of our states and territories and to public institutions like our universities to work together and speak with one voice on the world stage. You wouldn't think that was a particularly controversial proposition. It applies to Australian public universities, not to private ones—that's an important distinction to make. But of course all universities, public and private, are encouraged to be transparent about their arrangements with foreign institutions by taking up the opportunity to consult voluntarily and to publish information about those arrangements on their websites so that both the public and our diplomats can properly understand the foreign policy implications of potential arrangements before they're entered into.

It's important that our universities are able to engage freely and fully on the world stage. It's the nature of good research in this era that our universities need to be able to collaborate with other universities. But it's important that when the Australian public makes an investment in research, when it makes an investment in intellectual property, it gets the dividend of that—that it isn't snaffled up by another government with another agenda which doesn't necessarily align with the interests of the Australian people. And it is vital that state governments understand, at all times, not only the constitutional separation of duties which means that the Commonwealth is in charge in this matter but that consultation is key to our foreign policy being consistent nationwide.

David Van (Victoria, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Australia’s Foreign Relations (State and Territory Arrangements) Bill 2020 and the related bill which are before the Senate today. Before I go into the details of these bills, I recognise the government's continued commitment to participating in the international rules based order and our ongoing efforts to ensure that Australia's best interests are at the forefront of our thinking. I think it's also important to note that just today we've seen a display of the sort of appalling behaviour that can occur when nation-states feel that they are above the rules based order and resort to belligerence rather than diplomacy.

As I've said earlier in this place, Australia has a proud history of helping to found and support various international frameworks, rules and institutions that have evolved since the destruction and carnage of the two world wars last century. Through the work of organisations such as the UN, the World Bank, the IMF and the WTO, Australia and countries in our region have benefited from the expertise and assistance that those bodies have brought to bear in times of crisis. But I think it is important to remind people how important these international institutions are in providing a stable and prosperous international community. Without them, things such as trade agreements, international aid and responses to health crises would have been difficult to achieve. The capacity to raise standards of living in developing nations, to lift people out of poverty, would also not be possible.

Australia, as a trading nation, relies on an open and free world trading system, and that is supported by an international rules based order to maintain peace and prosperity. Without that system, Australia would not have enjoyed 28 years of uninterrupted growth, expanded export markets for both goods and services and an international reputation for low sovereign risk and measured diplomacy. Of course, no system is perfect, and I will not stand here and say that I think all multilateral bodies are perfect. They are not, and some reform is needed and inevitable. That is why it is important that Australia has a consistent approach to dealing with the vagaries of international events through a measured and thoughtful approach to foreign policy. Australia cannot afford to have a fragmented approach to developing foreign policy. International agreements that bind Australia's academia, research and state, territory and local governments to actions that are inconsistent with Australia's foreign policy should not be entered into. If they are, they show naivety, wilful ignorance or blind incompetence in their development.

These bills will provide the public with confidence that the arrangements of state and territory entities with foreign governments are consistent with Australia's foreign policy interests. The Australian government, through the Department of Foreign Affairs and Trade, has the expertise necessary to assess whether arrangements with foreign governments are consistent with our foreign policy and therefore consistent with our national interest. Without consultation, the Australian government has no opportunity to review the proposed arrangements and apply that expertise. Without due diligence and consultation, we risk having a patchwork of relationships, contracts, MOUs and collaborations that could be counter to or have an adverse effect on our foreign policy interests. The Australian government and our states and territories need to work together on the international stage to speak with one voice.

There is no better example of how important this is than in my home state of Victoria. The Andrews government signing up to China's Belt and Road Initiative is just another example of how badly they manage Victoria's interests. Premier Andrews signing up to an international $1.5 trillion initiative without even consulting those who are responsible for Australia's foreign policy is just wilful irresponsibility on behalf of his government. I cannot imagine why a government, let alone its premier, thought that signing a memorandum of understanding with a foreign government without thinking about its impact on Australia's interests was the right way to go. The secretive nature of how this agreement came about, the lack of consultation and the poor way it has been handled since just confirms that this ineptitude is business as usual for the Andrews government.

We've seen this ineptitude and secretiveness more recently with the failed hotel quarantine program, resulting in a lockdown that has destroyed Victoria's economy. Just today we hear ratings agencies saying it's a fifty-fifty bet that Victoria will lose its AAA credit rating. As reported in the Financial Review today, an S&P analyst said:

We consider the downside risks to Victoria's AAA rating are rising substantially.

These bills will establish an approval regime and a notification regime—a regime that applies to the proposed and existing international agreements. If they're proposed, the foreign minister can declare that they will not go ahead. If they're already in place, the minister can declare that they are invalid. State and territory entities wanting to enter into agreement with the government of another country or one of its agencies will be required to notify and get approval from the foreign minister. The state, territory, local government or Australian university which wishes to make an arrangement with a foreign entity must notify the foreign minister of that arrangement. The foreign minister's approval in these instances is not required. However, the foreign minister does have the discretion to declare they are invalid or cannot proceed if they are inconsistent with foreign policy.

These laws will ensure that, as a nation, we are consistent in how we deal with the world and that all states and territories conclude foreign arrangements that are only in our national interest. The test is whether the foreign minister is satisfied that an arrangement or its negotiation does not adversely affect Australia's foreign relations or is unlikely to do so, and that it's not inconsistent with Australia's foreign policy and is unlikely to be so.

In concluding my remarks, it must be emphasised that these bills intend to address foreign engagement for state and territory governments and their entities. This approach reflects this government's focus on ensuring consistency of Australia's foreign policy and foreign relations across all levels of government. Through our network of academic, economic, trade and security agreements, alliances and membership, Australia draws numerous benefits. Our economic prosperity relies on them, but they must overall be in the country's national interest first and last. Sovereignty can and should outweigh money. Without a measured and thoughtful approach that takes in Australia's national interest when entering into these agreements, we'll find ourselves appearing fragmented, inconsistent and ununited in our approach to foreign affairs. I commend the bill.

Concetta Fierravanti-Wells (NSW, Liberal Party) Share this | Link to this | Hansard source

Having participated in the Senate committee hearings, the evidence again reinforced concerns I have publicly raised over a long period of time about foreign interference and foreign influence in Australia, most especially from the communist regime in Beijing. These bills, Australia's Foreign Relations (State and Territory Arrangements) Bill 2020 and Australia's Foreign Relations (State and Territory Arrangements) (Consequential Amendments) Bill, are part of the suite of measures which the government is increasingly relying upon to confront the insidious and growing threat of foreign interference and foreign influence in Australia. It is important that arrangements of state and territory governments are consistent with Australian foreign policy.

The Commonwealth and states and territories need to speak, as has been said, with one voice. This is especially the case when, in relation to China, we are finally recognising that it can no longer be business as usual with the communist regime. Whilst there are a number of other schemes that aim to protect Australia's interests in dealings with foreign entities, they serve different purposes. However, gaps remain. One concern that I have raised repeatedly is the exemption Commonwealth, state and territory and local governments enjoy from foreign investment review. Notwithstanding the proposed major reforms to the FIRB framework, the exemption remains in place except where a government proposes to sell to a foreign government and if the subject of the sale is public infrastructure or where the interest being acquired is a national security business or national security land.

These bills seek to deal with another critical gap of facilitating Commonwealth oversight of foreign arrangements entered into by states and territories and their entities. Whilst they are an important step, I do not believe they go far enough. Following the report of the committee, the government has included a definition of 'institutional autonomy'. This is particularly important regarding the university sector. However, I am disappointed that there hasn't been consistency by also including a definition of 'corporate autonomy'.

I have repeatedly outlined concerns regarding the operation of foreign state-owned enterprises in Australia, especially where those corporations are operating commercial activities in critical sectors, critical infrastructure, and, more importantly, in sectors where national security concerns exist. Arrangements with SOEs that operate on a commercial basis, including commercial leases, are not the focus of these bills, but these are the very arrangements which have given rise to public concerns. Their exclusion from this legislation affects its very credibility.

I think we need to be clear with the Australian public. Arrangements with entities that operate in a democratic framework are not likely to give rise to concerns. It is those entities which operate under totalitarian regimes and have no autonomy that are of greatest concern. I have used the example of Chinese companies where corporate governance is virtually non-existent. Article 19 of China's company law states: 'In companies Communist Party organisation shall, in accordance with the provisions of the Constitution of the Communist Party of China, be set up to carry out activities of the party. Companies shall provide the necessary conditions for the party organisation to carry out their activities.' This puts the CCP front and centre, irrespective of whether companies operate inside or outside of China. A South China Morning Post article of 3 November 2020 outlines Beijing's new plan for SOEs, citing comments by Xi Jinping:

They form the economic and political foundation of China's socialist system and are a key pillar for the [Communist] Party's rule. They must be built stronger, better and larger…

He added that the 'sector's role cannot be negated or weakened'.

Indeed, Beijing calls the shots, no matter how large the corporation. According to recent media reports, Xi Jinping personally made the decision to halt the initial public offering of Ant Group, which would have been the world's biggest, after controlling shareholder Jack Ma infuriated government leaders when he compared the lending practices of state-owned banks in China to pawnshops.

A 2017 paper titled 'Mapping the legal landscape: Chinese government-owned companies in Australia' by Professor Tomasic and Dr Xiong, explores the legal contours of Chinese controlled investment in Australia. It is noted that, by 2016, there were 66 Chinese SOEs with 214 subsidiaries in Australia operating across most industry sectors. The Productivity Commission's June 2020 research paper titled 'Foreign investment in Australia' finds our largest FDI sources remain the US, Japan and UK. However it states:

Chinese investors have significantly increased their holdings in the past decade, although identifying the precise value is difficult. Data suggest that flows into Australia for which the ultimate beneficial owner is from China are about three times as high as those for which they are the immediate owner, as funds flow through corporate structures in third countries.

Chinese investment has grown in the past decade from low levels in 2008 to become Australia's fifth largest FDI investor, with four per cent of total FDI stocks at the end of 2018. The PC states that, in recent years, national security concerns around inward FDI have tended to involve Chinese investors and that, in the past, much of this concern was directed at SOEs or sovereign wealth funds as opaque arms of government, accused of investing for non-commercial or strategic reasons.

The PC also states that, more recently, FDI by privately owned Chinese companies has also generated consternation. In part, this is because Chinese law can require all Chinese companies to 'maintain national security' or to support Chinese government security activities. It cites the American Enterprise Institute going so far as to state:

… there is no difference in the control the Communist Party can exercise over private firms and SOEs … [so] there is no justification to treat them differently with regard to national security.

The PC paper cites examples where Chinese investment has raised national security concerns in Australia, including: the 2018 Huawei decision; the lease of the port of Darwin to Landbridge; the 2016 attempt by the New South Wales government to sell 50.4 per cent of Ausgrid on a 99 year lease to Chinese SOE State Grid Corporation and Hong Kong's Cheung Kong Infrastructure Holdings; and the March 2009 bid for OZ Minerals by China Minmetals. The PC pertinently highlights the increase in public opposition to Chinese investment. A 2019 Lowy Institute poll found that 68 per cent of respondents thought that Australia allows too much investment from China. The PC also notes that, whereas Australia has previously seen community opposition to FDI during periods of rapid increase in investment from specific countries, namely the US in the 1960s and Japan in the 1980s, this is the first period of rapid increase in investment from a country that is not a democratic country, nor a military ally.

Considering the extent of Chinese investment both by SOEs and so-called privately-owned companies, our failure to exclude arrangements with such entities in the bills weakens their credibility. It is the elephant in the room. What is the point of having such legislation when we are excluding from its reach the very entities that are most likely to engage in the very activities that these bills seek to cover?

In relation to the university sector, I was especially concerned to note the negative attitude, not only to the bills, but also that the government would even presume to affect the sector's activities through the enactment of these bills. Our university sector, together with a wide chorus of businessmen, have urged us to effectively ignore the communist regime's many excesses in favour of the continuation of the rivers of gold.

The outgoing threats by China are symptomatic of the predicament we find ourselves in, noting that years of questionable and defective foreign and trade policy have made us vulnerable to economic coercion. For years, those who have had responsibility for our fellow-traveller foreign policy were prepared to ignore CCP skullduggery so long as the rivers of gold continued to flow. This is a bad business model, and we are now paying the price for not having diversified our trade and instead concentrated one-third of our exports into one market. It defies basic business practice 101!

I know that many Australians who have contacted me do not agree with the defence minister's comments on 9 September that there are no security concerns regarding the Port of Darwin. How can one of our most strategic assets in northern Australia—the gateway to Australia—be leased to a company with ties to the communist regime in Beijing? How can this not be a matter of concern? It simply doesn't pass the pub test! There is absolutely no doubt that, were the lease of the port to be considered today, it would be not only subject to FIRB review, but most likely rejected. It is obvious from the Northern Territory submission and evidence at the hearing that there is contemplation of a reacquisition of the port, given the clear reference by Chief Minister Gunner to compensation for declaring arrangements invalid. It is appropriate that the Commonwealth seek to ensure state and territory consultation regarding foreign arrangements. The fact that no state or territory government chose to attend and give evidence is in itself indicative of their lack of appreciation of the need for their actions to be consistent with our foreign policy.

I am especially disappointed that my very detailed questions on notice to New South Wales Premier Berejiklian and Chief Minister Gunner were not even responded to. As a senator for New South Wales, I and many of my constituents are particularly concerned about the extensive arrangements between New South Wales and Chinese entities in critical areas like energy, public infrastructure and transport. This is especially concerning given the actions of a number of governments, especially in their dealings with the CCP and its Belt and Road strategy. Whilst promoted as an avenue for providing infrastructure funding, it is basically a debt trap and influence strategy, mostly resulting in debt-for-equity arrangements.

As Minister for International Development and the Pacific, I saw firsthand how debt-trap diplomacy operated. Following my public warnings about China's activities, most especially in the Pacific, an international debate ensued about debt-trap diplomacy and the examples in different parts of the world which had left countries and areas with unsustainable debts. In addition, BRI is not about local jobs, with projects usually constructed by Chinese firms with their own labour.

Here in Australia we have seen the Beijing drafted MOU and agreements between China and Victoria. The willingness of Premier Andrews to deal with the communist regime in Beijing has rightly earned him the label 'Chairman Dan'.

The government has made a number of amendments which have improved the bills and I welcome that. I note that more amendments will be proposed. It is important that we keep an open mind about them so that these bills can be improved further.